Monday, May 28, 2012

Just returned from the NDIA-sponsored Environment, Energy
Security and Sustainability (E2S2) Conference in New Orleans. The Big Easy is a great place for a
conference. At 7 P.M., the streets smell
like stale beer and desperation. By 11,
they smell like ambrosia and opportunity. I recommend you stay away from submariners and Sazeracs.

The conference itself was divided into three tracks and I
attended the one on Energy Security. Vendors displayed their wares in about one quarter the space previously
used and, although the organizers said attendance was up, the impact of a
dwindling DOD budget was evident. This
caused one industry participant to ask about the drop in attendance, “Is the
industry losing interest or patience as the military struggles to make progress?” If what appears to be happening is actually happening, government will never be
able to achieve its mandates. It sorely needs
industry.

There were numerous informational briefings, but not a lot of
new information. There was a promise that the Huntsville RFP would be on the street in six-to-eight weeks (Dr. Robyn) and the
Army announced that it has finally gotten its Initial
Capabilities Document for Operational Energy through the Joint Staff. I first mentioned this in a post in October
2010. Only a couple of more years
until the actual Requirements are placed on the Acquisition Community to
fulfill.

One of the comments by the Army's COL Paul Roege was
about a concept for something called “energy informed operations”. The idea is that technology is a facilitator,
but behavior is the sure way to energy efficiency and conservation. I believe this to be true. My experience with the Power Surety Task
Force was that, after we implemented energy savings measures at FOBs, rather than
take the savings, commanders were able to bring other facilities online (MWR,
GreenBeans, etc.) with the energy they had now “freed up”. This is Jevons paradox which states that a
technology process that increase efficiency tends to increase the rate of
consumption of that resource. My energy
guru, Amory Lovins
dismisses the assertion that “energy efficiency generally triggers economic
growth that devours its savings”, but the concept of behavior as the ultimate
efficiency certainly is valid.

The best discussion that I attended was moderated by PaulBollinger of Boeing. Mr. Bollinger is a former DepSec Army and Air Force for
energy, so he knows the system. Paul described his mission as:

To engage in an
interactive discussion on the issue of 3rd party financing for renewable energy
projects. The issue is that the military
is not moving forward as quickly as the industry and, perhaps, the military would
like.

I say moderated much in the way a lion tamer “moderates”
big cats with whip, chair and pistol. In
this case, the cats were government and industry representatives. For the Government’s side: Honorable Terry A.
Yonkers, Assistant Secretary of the Air Force for Installations, Environment
and Logistics; Honorable Katherine Hammack, Assistant Secretary of the Army for
Installations, Energy and Environment; and Tom Hicks, Deputy Assistant
Secretary of the Navy for Energy. From
industry: Mr. Dave Buemi of Suniva, Mr. Scott Foster of Hannon Armstrong (finances
infrastructure technology) and Mr. Baird Brown from the law firm of Drinker
Biddle.

Although Mr. Brown spoke about
utilities, there was no representation from that community on the panel. Pity. Without the utilities present, government and industry can chat, but
they are only two legs of the stool. Bollinger
kept the big cats in line and provoked a lively discussion. Judging by the occasional exasperated looks on the faces
of the participants, I would say it went beyond lively.

Mr. Bollinger’s opening comments are worth including here
because I think they frame the vital questions about how the Services will
achieve the SecDef’s pronounced goal of three gigawatts of renewable energy by
2025. Third party financing requires
equal participation by industry, government and the utilities. If a win-win-win situation cannot be created,
it will be lose-lose-lose. Here are Paul’s
opening questions:

From a renewable energy company
perspective the issue is: who will hold the contract and who will finance the
work?

From the finance companies' perspective the issue is whether they want to use their money to fund federal
projects which are delayed, with contract language uncertain, and the details on
how this will work quite murky. Is this a
good risk and will they make any money?

From the utilities perspective they
are asking themselves, so…you want me to help you reduce the energy consumption
of our largest customer, introduce large amounts of renewable energy that could
make the grid more volatile and you want me to pay for any excess power you
generate, and this adds value to our shareholders in what way?

Of course this never happens
because the PUC regulations won’t allow 3rd party financiers to build renewable
energy projects without the approval and most likely, the partnership with the
3rd party. (Author note: See 3rd-Party
Solar PPA Policies)

Except for Nellis AFB, most if not
all energy projects have been small on military bases. How can we break out of this
paradigm and still have our sanity and make money doing it? Will microgrids be considered part of the
solution or will they continue to be the poor stepchild waiting for adoption?

How do renewable energy projects
compete against conventional power that is some cases is subsidized by the
local community?

Each panelist got two minutes to say their piece. Mr. Yonkers seemed to wonder why industry was dragging
its feet on energy projects. When
industry folks challenged that assertion, Mr. Yonkers allowed that AF people at
lower levels were not performing to standard, so his intent was to pull the
authority to execute third party agreements to his level. I can’t think of an example where elevating
decision making authority has ever expedited a process, but I am sure there is one.

Despite this, each of the government reps allowed how
things would go much better if the authority for PPAs could be pushed down from
the Service Secretaries to their Ass't Sec level.
Agile organizations decentralize decision making and hold people
ruthlessly accountable. Seems like this
would be a useful model for DOD.

Bollinger’s droll and acerbic moderation provided for an
informative discussion that could have gone on for hours. The organizers had placed question cards on
each seat and microphones for question from the gallery, but no time was
available. Paul asked all of the questions. The
bottom line is that the questions Mr. Bollinger asked in his opening remain open. DOD is the only institution that can
set the conditions for success, but it must give up what I call the arrogance
of the checkbook. “I write the check,
you dance to my tune.”

DOD is not writing the checks; they are simple buying
the energy the utilities would sell them regardless. Until DOD actually places a value on energy security,
figures out how to decentralize decision making (ask Petraeus) and finds a way
to work with the utilities in a cooperative manner, third party financing will
only work within a very narrow set of circumstances. The southeast will continue to be a waste
land for renewable energy and industry will continue to be frustrated with DOD’s
unwillingness to recognize an altered state in how it must do business. Dan Nolan

Friday, May 18, 2012

I believe that America has the opportunity, capability and
financial wherewithal to lead the world in the production of alternative forms
of electricity and fuel. We already lead the
world in energy
storage R&D and a concerted effort by government and industry could
push us into the lead in other areas, just as it did with electrification and
information technologies. But now,
shortsighted politicians (I used to call them political leaders, but they have
lost the right to that sobriquet) are not only attempting to strangle that baby
in the crib, they want to turn back the clock.

DOD is doing R&D on biofuels to determine their impact
on their mobility systems and as well as the ability to sustain domestic
training operations with a substitute for petroleum. They are doing it because they are required
by law. The current energy policy is
expressed in two laws (EPAct 2005 and EISA 2007) and two executive orders,
(13423 and 13514). They provide sufficient guidance for DOD to create strategy,
operational direction and tactical instruction. These, along with the National
Defense Authorization Act of 2007 require DOD to have target purchase, by 2022,
of cellulosic ethanol - 16 billion gallons; biomass based diesel - 5 billion
gallons; and other biofuels - 15 billion gallons. Not so fast, says the right Horrible Senator
from Oklahoma.

In an article in Forbes
magazine, Senator James Inhofe (R-OK) blasts SecDef Panetta for ensuring
that DOD follows the law. Sen. Inhofe accuses Panetta of
wasting money on expensive fuels while the President is gutting the DOD by a half trillion dollars
over the next ten years. I might be wrong, but I seem to recall that that was
an effect of Congress’ failure to trim $1.2 trillion from the Fed budget, which
invoked the sequestration clause, also penned by Congress. Gee, Senator, if you and your 99 buddies in
the upper house could have issued a budget at all in the last three years,
perhaps we could be having a more enlightened discussion. Unfortunately, we cannot.

The version of the NDAA 2013 that came out of the House
Armed Services Committee contained provisions to prevent DOD from investing in
and deploying low-carbon, renewable fuels. This turns back time.
I am sure that will make Senator Inhofe very happy, much the way it would
Hugo Chavez and Mahmoud Ahmadinejad. But othersare not so pleased.

We have to find new sources of
fuel. As long as the United States is beholden to global energy prices, our
country is vulnerable. The Air Force and Army are increasing the fuel
efficiency of the vehicles we use to fight, transport troops, and provide
support. The Navy is investing in advanced biofuels programs that will enhance
its power-projection capability. The Marines are operationalizing common assets
like wind and solar power to decrease energy vulnerability. These initiatives
have been undertaken in partnerships with American firms and are creating jobs
for American workers.

Some Members of Congress, however,
oppose these critical programs. They choose to waste time by advocating
policies that have already proven to be failures and attack the military for
investing in prudent measures that will save lives. Taking control of our
energy future would mean preventing future conflicts around the world and
protecting Americans here at home.

It is time to secure America with clean
energy. All of our civilian leaders must match the military’s commitment and
stop putting partisan politics ahead of good policy. We call on Congress to
support the Department of Defense as it invests in clean, domestic, alternative
sources of energy for the sake of the security of the United States of America.

Since the opposition to DOD’s efforts seem to be coming from
the political party that professes to defer to the Generals in matters pertaining
to the military, it should be relatively easy to, well, defer to the
Generals. Go ask Generals Marty Dempsey and Ray
Odierno what they think. I am sure ADM
Greenert as well as Generals Amos and Schwartz will give you their professional
opinions as well.

Nicole
Lederer, Co-Founder of Environmental Entrepreneurs (www.e2.org) has
called upon her constituency to petition their Senators to oppose this action
and to allow DOD to take the prudent action necessary to secure their mission
essential energy requirements. As a fellow entrepreneur, the market that DOD represents
is enticing. Their commitment will improve the technology, increase private
investment and drives down the cost.
Think microprocessor. Their
change in behavior could impact the society at large. Think racial and gender equality. What is at risk here? Worst case scenario is we identify a dead end
path for economic investment. The
upside? The Saudi Arabia of biofuels.

If anyone knows the cost for operating a U.S. Navy Battle
Group in the Straits of Malacca for a day, please pass that along to me. Right now, Japan and China feel assured in their
access to oil because the U.S. insures it.
If they do not get oil, America’s economy suffers, so we have to insure
their access. What if we develop the
technology to create drop in replacement biofuels that we can license to Japan
and China? Worst case scenario? China steals it and exploits it. Upside?
Petro-dictators can no longer buy off political dissidents with the
profits you and I put in their pockets.
Ever wonder why there was no Arab Spring in Saudi Arabia?

It is quite possible that I am living in a fool’s paradise,
where all men and women have a sense of loyalty, duty, respect, selfless
service, honor, integrity and personal courage.
The dysfunction of our government, the shortsightedness of business and
the lack of commitment from our populace to pay the price of civilization will
not dissuade me from my Pollyanna view of the world. But at some point, I will stop arguing with
idiots; they just drag you down to their level and beat you with experience.

Tuesday, May 15, 2012

With the rash of stories this past year on failures of US solar companies, the lack of speedy adoption of electric vehicles, and the boom in un-conventional natural gas and oil, occasional readers of the DOD Energy Blog might wonder whether renewables and energy efficiency have lost some of their luster for operational and facilities energy applications.

Reminding us of how tightly bound the DOD remains to oil, Farrell says:

When speaking of petroleum, independence is a myth, regardless of where it comes from. The fact is that, for transportation energy, there is no diversity of supply or source.

And looks a few years into the future:

Diversity has strengths of its own. The current positive situation of domestic supply will last a few years at best — perhaps out to 2030 or so. At some point global demand and increasing difficulties to get supplies will catch up.

Concluding with a vote of confidence that DOD leadership is still on point on energy strategy:

We have the gift of time to address the problem. Knowledgeable leaders in the Defense Department realize this. It is unlikely that they will slacken their efforts to bring solutions to operational capability. There really is no other choice.

I believe Farrell's observations and conclusions are correct, but Dan and I would be happy to hear if you see things the same way. Andy Bochman

Friday, May 11, 2012

Over the past few months, the Air Force
Facilities Energy Center (AFFEC) has
provided a running review of current Air Force energy efforts in the form of the very excellent Energy Express. AFFEC is a
wholly owned subsidiary of the AF Civil Engineering Support Agency (AFCESA) and
handles all AF energy related issue If you haven’t read
the Energy Express (EE), they are available here. It has recently gone from a quarterly to
monthly publication and serves an audience of military, industry and utilities
partners. A couple of interesting
articles in the last few months caught my eye and I recommend the magazine to
all interested in DOD energy.

In the February issue there was a brief mention of the AF’s
Sustainable Infrastructure Assessments (SIA) that are ongoing. The purposed of the SIAs are twofold. One is to meet the requirement for quadrennial
assessments of all real property for energy status and, two, is to establish a
priority for investment. The Air Force is getting help
from the Army Corps of Engineers (COE) on the process. What peaked my interest is that, since the AF recognizes that it will have to use third party
financing to achieve their energy conservation goals and that those vehicles
usually involve a no cost energy assessment in order to determine the energy saving
measures (ESMs) to apply, is the AF wasting money and delaying the start of
projects by going through the SIA process?
Does the COE have the same expertise (and cost) as commercial entities
that do this for a living? If the government is paying itself to perform government
mandated energy assessments, have we created a self-licking ice cream cone? The article implied that the AF and COE would be conducting the level 2 audits, but a quick query to the staff at EE affirmed that the COE was only helping in the contracting for companies to do the audits (whew!). Still, are there going to do dual audits?

The May issue has a piece on the gap between operational
energy and facility energy. At our large
“forward operating bases” we really do not have operational energy or facility
energy; we have LOGCAP energy. A recent
survey by AFCESA at Al Udeid Air Base in
Qatar found that the enduring base was paying a variety of rates for its
electricity, from $.07 to $.49 a kilowatt hour. (A base designated as enduring can use
military construction dollars instead of expeditionary funding to pay for
infrastructure development.) Besides the
disparate rate structure, the AFCESA team noted that individual window AC units
could be replaced, saving millions annually.
They also recommended spray foam and other thermal insulation for many
of the large tension fabric shelters that require environmental control. These are all brilliant recommendations….. just
as they were in January 2010.

January 2010 was when the Air Force Energy Assessment Team outbriefed
the Vice Chief of Staff of the Air Force on the results of the operational
energy assessment done in theater earlier that month. Many of the recommendations made by the
AFCESA could have been quoted from the AFEAT’s report…or the Marine Energy
Assessment Team report….or the Power Surety Task Force Report….or...

Last month I received a call from a friend
of mine who had just returned from theater where he was doing an assessment of
Army operational energy. I reeled off
what he had found before he began talking.
The findings continue to be the same, as are the recommendation. I am assuming someone in the Assistant
Secretary of Defense for Operational Energy Plans and Programs has pulled
copies of all these reports, collated the like observations and has told the Service,
“Hey, this has already been observed; just go fix it!”. I would truly like to believe that.

I believe in measuring a hundred times so that I only have
to cut once. That being said, at some
point you have to shoot the engineer and build the bridge. Perhaps this is just a case of Doubting
Thomas, but at some point we need to stop the studies and demonstrations and
just build the bridge.

My point was, (and I did have one), the AFFEC Energy Express is an excellent publication (way to go, Jennifer and Amy!) and I highly encourage the other Services invest in a similar communications
tool. It is a great way to spread the
good ideas among engineers, but an even better means to enlighten
commanders. When the commander at
Edwards AFB discovered that they had overpaid their electric bill by $3.67M
(March 2012) and sought redress, I am sure other commanders (if they read the
Express) would be going over their light bills with a fine tooth comb. I salute the AF for doing the dirty laundry
in public and not just telling the many good stories they could. A
smart man learns from his own mistakes; a wise man from the mistakes of
others. Dan Nolan

Thursday, May 3, 2012

Stop. Go get a cup of coffee and then get comfortable. This one is a bit of a ride. Part rant and part observation, it is, as Andy B would say, an overlong review of the most recent conference on smart microgrids in development and demonstration by DOD. Comfy? Good.

I attended the TTC sponsored Military Smart Grids & Microgrids Conference in Arlington, VA. The goal of the meeting was to ” bring together the key planners and technical experts who are leading the way in developing military smart and microgrid systems”. Mission accomplished. Lots of fascinating presentations on the engineering, cyber security, care and feeding of a smart microgrid. What is a smart microgrid you might ask? TCC describes it a “localized groupings of power generation, storage and load management units”, but, please feel free to continue to ask.

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About

This blog tracks the energy challenges facing the US Department of Defense in the early 21st century. Drawing from the best thinking inside and outside the Pentagon, it examines problems and identifies possible short, medium and long term solutions in technology and policy.

Andy Bochman runs the DOD Energy Blog and can be reached at andybochman at gmail dot com